'Feel-good' factor is back: NCAER

NEW DELHI: The "feel-good" factor appears to be back with business confidence surging by 6.5 per cent on the hope of a 6.5-6.7 per cent growth in economy, economic think-tank NCAER said on Sunday.

"The feel-good factor appears to be back, though in varying intensity for different types of firms," NCAER said in its quarterly review.

The Business Confidence Index, which improved to 136 in October 2004, has improved by 6.5 per cent to 142.5 in January 2005, which is close to April 2004 levels.

"It is indeed amazing that even an uneven monsoon could not deter the economy from registering robust growth during 2004-05. This clearly speaks of the increased resilience of Indian economy now as compared to five years or a decade ago," it said.

Based on CSO estimate of 7 per cent growth in April-September 2004-05, NCAER said "Indian economy during this fiscal would clock a GDP growth of about 6.5-6.7 per cent."

The output of manufacturing sector looks bright with IIP clocking 8.9 per cent in April-November 2004. Exports are up by 23.4 per cent and imports by 33.6 per cent in April-December 2004.

Apart from growth, NCAER said there has been an improvement in tax collection and railway freight traffic.

"The upturn in the economic cycle is thus clear and it appears that there is no looking back," it said.